It is also asserted by counsel that, at the time the visa petition on behalf of the appellant was approved, it was the administrative view that the fact that an alien had stock control of a corporation did not bar the corporation from executing a visa petition on behalf of the alien, and that this was a contemporaneous interpretation of the statute. He submitted a copy of Lena Orlow's letter of October 13, 1954, to the Assistant Commissioner in which she raised the question of whether her client "who has capital of approximately $100,000 could create a corporation in which he might be the major stockholder*** and whether such a corporation as this could act as the petitioner, so that his interest in this corporation would not prevent his securing first preference in the quota ***." In reply to this letter, the Assistant Commissioner stated on October 20, 1954, that, if it can be established that the corporation is a bona fide one which has an urgent need for the alien's services within the meaning of the statutory provision mentioned above, "the fact that the beneficiary is the major stockholder of the corporation would not prevent the corporation from filing a petition on your client's behalf."

Counsel also contends that the prior administrative decisions concerning the appellant are entitled to great weight. These were the decision of the district director approving the visa petition, the decision of the American consular officer on September 25, 1953, under 8 U.S.C. 1182 (a) and 1201 (g) that M——— was eligible to reMceive an immigrant visa, the decision of the immigration officer on September 26, 1953, that the appellant was admissible to the United States, and the decisions of the Service on December 8, 1953, and December 17, 1954, granting reentry permits to the appellant since these again recognized his status as a lawful permanent resident of the United States. Although these prior administrative decisions in the appellant's case are not conclusive, they are entitled to considerable weight.

The situation regarding the prior administrative decisions in the appellant's case is somewhat similar to the cases in which persons of Chinese descent have been admitted to the United States as citizens, and the courts have held that such an administrative determination by the immigration officials is prima facie evidence of United States citizenship until overcome by affirmative proof on the part of the Government that such person obtained admission to the United States fraudulently (Choy Yuen Chan v. United States, 30 F.2d 516 (C.C.A. 9, 1929); Leong Kwai Yin v. United States, 31 F.2d 738 (C.C.A. 9, 1929); Chun Kock Quon v. Proctor, 92 F.2d 326 (C.C.A. 9, 1937); Yuen Boo Ming v. United States, 103 F.2d 355 (C.C.A. 9, (1939)).

We believe there is considerable merit in the three contentions of counsel mentioned above, that is, that the court decisions in the

appellant's case, the contemporaneous administrative interpretation of the statute, and the administrative decisions in the appellant's case require a conclusion that the appellant's reentry permit was valid. However, we do not wish to base our decision solely on these grounds, and we will consider the two main contentions of the Service, namely, (1) that first preference status was secured by fraud or misrepresentation, and (2) that the visa petition was approved illegally, that is, that there was no statutory authority for that action.

(B) Was visa petition approval procured through fraud or misrepresentation!

With respect to the asserted procurement of first preference status by fraud or misrepresentation, the visa petition was executed on January 14, 1953, by G-CH- -, President of Western Tube Corporation. The principal contention of the Service is that the following matters were concealed in the visa petition: (1) that Western Tube Corporation was not an operating business; (2) that the entire project could not be undertaken without obtaining a governmental loan; and (3) that the appellant was the sole owner of Western Tube Corporation.

As to the first matter, item 4 of the visa petition requests a description of the nature of the business conducted by the petitioner and was answered, "Seamless tubes manufacturing-Business just being formed." Mr. H-L was the district director of the Service who approved M-'s visa petition, and immediately prior to that action he had received a letter dated March 7, 1953, from Mr. UC which contained the statement, "One reason the company has not progressed more rapidly has been the uncertainty of Mr. M's immigration status."

At the hearing Mr. L testified that he and H-F-, the immediate supervisor of visa petitions, had discussed Western Tube Corporation's visa petition on at least two occasions, on one of which Mr. H— was also present; that Mr. H— explained that the corporation "had great plans of building a plant in Whittier * * * and he pointed out the need of Mr. M to help erect this plant, as far as its construction, and oversee its operation after completion." Mr. L specifically admitted that he was aware that Western Tube Corporation had not yet erected its plant. Hence, there was no concealment of the fact that Western Tube Corporation was not an operating business and, on the contrary, the district director of the Service was fully aware that the plant had not even been erected.

The second matter which is supposed to have been concealed is that the entire project was dependent upon securing a loan from the government. Mr. L was asked whether he was aware that

Western Tube Corporation was awaiting a loan from the government before it would go ahead in full swing with its business, and he answered, "I am not sure. I didn't consider that too much of a point." Mr. C's letter of March 7, 1953, to Mr. L was accompanied by a copy of a communication dated March 5, 1953, from Lehman Brothers. The letter of Lehman Brothers is now attached to the visa petition. It contained a specific statement indicating that Western Tube Corporation had requested from appropriate governmental agencies a loan amounting to 90 per cent of approximately $30,000,000. Accordingly, there was no concealment of this matter.

The third matter relates to whether the appellant concealed the fact that he was the sole owner of Western Tube Corporation. Counsel contends that in December 1952 it was agreed with the Manheim brothers that M- was to become a minority stockholder and that equitably he no longer was the sole stockholder at the time the visa petition was executed. Mr. H's affidavit dated December 16, 1952, attached to the visa petition, contains the statement that Western Tube Corporation was "originally organized by Mr. N-M."

The situation concerning the ownership of Western Tube Corporation, when examined realistically, was this. The company was incorporated in Delaware on April 17, 1951. Its authorized common stock was $1,000,000 but only $1,000 of common stock was outstanding. At the time the visa petition was executed the appellant was the legal owner of all the outstanding stock. Western Tube Corporation had no appreciable assets with the exception of the considerable sums which had been expended in preliminary planning and surveys, down payment on the plant site, etc. These sums had been furnished by the appellant personally or through Westcorp, Inc., another corporation owned by him. Although the appellant was the sole stockholder of Western Tube Corporation as it existed when the visa petition was filed, this was merely an embryonic corporation which was to grow into the $30,000,000 concerned envisioned by M and the other promoters.

The original Western Tube Corporation and the $30,000,000 Western Tube Corporation would have been the same legal entity. However, the visa petition was not predicated on the corporation as it was originally constituted but on the assumption that the financing would be arranged; that Western Tube Corporation would build its plant; and, as stated in Item 4 of the visa petition, that it would have a probable income of approximately $3,000,000. It is clear from the record that, in the $30,000,000 Western Tube Corporation, Lehman Brothers and the public would have had a substantial interest and the appellant would have been only a minority stockholder

The record is replete with evidence as to the bona fides of the efforts of the appellant and his associates to establish Western Tube Corporation as a manufacturer of seamless tubes in California. We do not believe there was any deliberate effort on the part of the appellant nor Mr. H-to conceal the fact that the appellant was the legal owner of all the outstanding stock of Western Tube Corporation at the time the visa petition was filed. Under all the circumstances of the case, we think the Western Tube Corporation project must be viewed in its entirety. Since the appellant would have been only a minority stockholder in the $30,000,000 Western Tube Corporation, we do not consider it material in this case that he was the actual owner of the outstanding stock ($1,000) of the embryonic Western Tube Corporation.

At page 121 of the brief of the Service there appears a statement that affirmative representations were made on behalf of the appllant "that substantial investment had, in fact, already been made to the extent of $28,000,000 (ex. 75)." Exhibit 75, previously mentioned, was a handwritten letter of UC to District Director L dated March 7, 1953. It contains no statement that $28,000,000 had already been invested, and the only similar passage was that $23,000,000 in equipment had been ordered.

The Service also stated at page 121 of its brief that Mr. C's letter of March 7, 1953, "represented that there had been expenditures of hundreds of thousands of dollars; that real estate had been 'purchased'; that $23,000,000 in equipment had been ordered." The Service characterized these three statements as false. The pertinent part of Mr. C's letter is as follows:

I have learned much more about the Company in the last two days. Three years' work and hundreds of thousands of dollars have gone into its planning and organization. Real estate has been bought from Southern Pacific for the plant site. Twenty-three million dollars in equipment has been ordered from the nation's largest machine suppliers.

In connection with Mr. C's reference to the expenditure of hundreds of thousands of dollars, the Service made the following statement: "M- admitted in his closing statement in this hearing at page 4811, that the representation he made at page 242, with reference to expenditures of hundreds of thousands of dollars, was untrue and that he was, in fact, speaking of prospective indebtedness to Westcorp by reason of future services" (emphasis as in original). At page 134 of the brief of the Service, there is another reference to this same matter. Although Mr. C― had mentioned the expenditure of hundreds of thousands of dollars, the appellant's testimony at pages 242-243 was: "The company (Western Tube Corporation) had to pay me, as the head of the Westcorp Company, approximately $300,000, and to me personally, approximately $80,000. The Westcorp was an engineering company and

had to make good all the expenses that were running up with all the work connected with the engineering phase."

Under an agreement dated March 21, 1952, between Western Tube Corporation and Westcorp., Inc., the former set forth its desire to obtain the benefit of the studies made by Westcorp relative to the project of establishing a new seamless tube mill on the West Coast, and Western Tube Corporation also employed Westcorp for general engineering services for a period of 2 years. As compensation for services previously rendered and to be rendered in the future, Western Tube Corporation was to pay Westcorp 4 per cent of the total cost of the seamless tube mill. Attached to Western Tube Corporation's RFC application dated September 25, 1953, was a copy of the contract of March 21, 1952, and a statement that a settlement had been made between Western Tube Corporation and Westcorp under which the latter accepted Western Tube Corporation's note for $300,000 in full payment of all services rendered theretofore, and the contract of March 21, 1952, was cancelled.

The $300,000 note to Westcorp and a note in favor of the appellant in the sum of $78,366.12 are shown under "Notes Payable" on page 10 of the RFC application. Hence, this information agrees substantially with the appellant's testimony. Mr. G-, who was formerly an employee of Westcorp, also confirmed the fact that the appellant had advanced approximately $80,000 directly to Western Tube Corporation and other funds through Westcorp, representing a total of close to one-half million dollars.

In connection with the allegation of the Service that M-admitted at page 4811 of the transcript that his testimony at page 242 was false, there is in truth no such admission. M- was being questioned concerning the sum due to Westcorp from Western Tube Corporation, the amount having been referred to by previous witnesses both as $300,000 and as $800,000. His testimony is to the effect that there had been a misunderstanding between H- and a Mr. B―, who prepared a report dated May 19, 1953, for Lehman Brothers, and that as a result B's report contained an erroneous statement indicating that Westcorp's expenses on behalf of Western Tube Corporation already amounted to $860,000. In reality, this represented the sum, based on 4 per cent of the value of the equipment ordered, that Western Tube Corporation was to pay Westcorp under the contract of March 21, 1952, for services already rendered and for services which Westcorp was to render in the future. M's testimony further indicates that, at the time of the application for the RFC loan, it was determined that Westcorp's expenses up to that time (apparently $300,000) should be paid.

There is no doubt that the appellant advanced considerable funds in connection with the Western Tube Corporation project. For